The primary objective of this clinical study is to compare free elastase concentration in BAL fluid in CF subjects following 28 days treatment. The secondary objectives of the study are to determine the effects of multiple doses of nebulized tg-hAAT on the following: 1) various biochemical markers of disease activity 2) BAL and plasma tg-hAAT concentrations; and 3) safety parameters. This clinical study is a Phase II, double blind, randomized, placebo controlled, study designed to compare free elastase concentration in bronchoalveolar lavage (BAL) fluid in subjects treated with 250mg tg-hAAT nebulized once daily, 250mg tg-hAAT nebulized twice daily or placebo. Eligible subjects will undergo a baseline BAL and 3-7 days later, will be randomized (stratified by center) to one of the following treatment groups: 1) 250 mg tg-hAAT nebulized once daily (n=16) 2) 250 mg tg-hAAT nebulized twice daily (n=16) 3) Placebo nebulized once daily (n=8) 4) Placebo nebulized twice daily (n=8). The subjects will receive their respective treatments once or twice daily for 28 days. A second BAL will be performed 24 hours after the final dose for once daily dosing and 12 hours after the final dose for twice daily dosing. Subjects will be monitored, for a period of at least two hours after each BAL until recovered, and will be discharged to home. Follow-up phone calls will be conducted on all subjects 48 hours post BAL. All subjects will receive the first and last dose of study medication in the clinic. An end of study safety assessment will be completed approximately two weeks after the final dose of study medication. The study assessments include the collection of BAL fluid samples for the measurement of tg-hAAT and total AAT, biochemical and microbiological markers of disease activity; blood sample collection for measurement of AAT-elastase complexes, tg-hAAT concentrations, antibodies to tg-hAAT and for standard clinical chemistry and hematology testing; urine collection for urinalysis and desmosine measurement; physical examination, vital signs; spirometry; questioning about adverse events.